India remains net steel importer in April despite slight uptick in production
India was a net importer of finished steel products in April for a second straight month despite a slight uptick in domestic production, latest provisional data from the Joint Plant Committee showed.
Finished steel production edged up 0.4% year on year to 10.52 million mt in April, the first month of India’s 2019-20 fiscal year.
India imported 586,000 mt of finished steel products in the month, down 2.3% on year, and exported 400,000 mt, down 30.7% over the same period, the data showed.
For the full fiscal year ended March 31, the country imported 7.84 million mt of steel products, up 4.7% on year, and exported 6.36 million mt, down 33.9% over the same period — ending India’s two straight years as a net steel exporter.
April marked the second straight month that India has been a net importer of steel products since exports exceeded imports in February.
“India is one of the major steel economies with consumption increasing at a higher rate than production and would remain a vulnerable target for inflow of cheap imports,” India’s steel ministry said in April. The majority of its imports is flat steel, especially high-quality automotive steel, which is not produced in India.
“Ground reality is that we did not see any demand push [in April]; particularly the auto sector was and is very weak,” a Mumbai-based trader said.
JPC’s data showed that India’s domestic consumption of finished steel totaled 7.51 million mt in April, up 6.5% on year. But in the auto segment, India produced 2.36 million vehicles in April, down 10.9% on year, separate data from the Society of Indian Automobile Manufacturers showed.
Sushim Banerjee, director general of the Institute for Steel Development and Growth, noted net imports of steel products, mostly flat products, in April were dwarfed by domestic production of flat steel at 5.78 million mt in the month.
“Many [times] imports take place on price considerations even if there is domestic production in those categories,” he noted.
India has seen “the highest growth rate in steel consumption among major steel-consuming markets,” local steelmaker JSW Steel said last Friday. “This, admittedly, has also made India a magnet to attract higher imports from steel surplus economies, especially from countries like Japan and South Korea [with whom India has] a free trade agreement,” JSW noted.
Japan and South Korea supplied the bulk of India’s steel product imports in April, a cabinet report from India’s Ministry of Steel showed, citing JPC data. Japan supplied 115,960 mt or 19.8% of total imports and South Korea 41.8% or 244,710 mt in the month, the data showed. Compared with April 2018, Japan’s exports to India were up 28% and South Korea’s up 18.4%.
“The effect of the safeguard measures in other countries has been visible in the appreciable increase of imports from South Korea, Japan and Indonesia; these are incidentally countries with whom we have FTAs,” the ministry said.
State-owned JPC is the sole body in India authorized to collect data on the domestic steel and iron industry.
Source: Platts